Question

Exercise 15-2 Tom and Julie formed a management consulting partnership on January 1, 2016. The fair value of the net assets invested by each partner follows: Tom $13,300 7,700 1,900 32,000 Julie $11,600 6,600 900 Cash Accounts receivable Office supplies Office equipment Land Accounts payable Mortgage payable 2,100 30,500 5,200 17,500 During the year, Tom withdrew $15,500 and Julle withdrew $12,900 in anticipation of operating profits. Net profit for 2016 was $52,600, which is to be allocated based on the original net capital investment. (a) Prepare journal entries to: 1. Record the initial investment in the partnership. 2. Record the withdrawals 3. Close the Income Summary and Drawing accounts, (Round intermediate calculations to 6 decimal places, e.g. 1.576843 answers to o decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent m entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. (To record initial investment by Tom)

Answer 1

A.1		Debit	Credit
	Cash	$13,300
	Account Receivable	$7,700
	Office Supplies	$1,900
	Office Equipments	$32,000
	Accounts payable		$2,100
	Tom Capital (Bal fig)		$52,800
		Debit	Credit
	Cash	$11,600
	Account Receivable	$6,600
	Office Supplies	$900
	Land	$30,500
	Accounts payable		$5,200
	Mortgage payable		$17,500
	Julie Capital (Bal fig)		$26,900
A.2
	Tom's Drawings	$15,500
	Cash		$15,500
	Julie's Drawings	$12,900
	Cash		$12,900
A.3
	Income Summary	$52,600
	Tom Capital		$34,846
	Julie Capital		$17,754
A.4
	Tom Capital	$15,500
	Julie Capital	$12,900
	Tom's Drawings		$15,500
	Julie's Drawings		$12,900
B
		Tom	Julie	Total
	Opening Capital	$52,800	$26,900	$79,700
	Add: Income	$34,846	$17,754	$52,600
	Less:Drawings	-$15,500	-$12,900	-$28,400
	Closing Capital	$72,146	$31,754	$1,03,900